Zakat on Business Inventory & Stock in Pakistan (2026 Guide)
If you trade, shopkeep or manufacture, your stock is zakatable at 2.5% — valued at today's selling price, not what you paid for it. Here is the full method, what counts and what doesn't, and two worked examples.
The quick answer
On your annual zakat date, total up everything in the business that is held for sale — finished goods, raw materials, work-in-progress — at current market value. Add your business cash and receivables, subtract short-term business debts, and pay 2.5% of the net figure if it exceeds the nisab threshold. That is the entire method; everything below is just doing it carefully.
Why stock is zakatable at all
Zakat falls on wealth that grows or is held for growth. Trade stock is the textbook case: goods bought specifically to be sold at a profit. That is why the goods on your shelves or in your warehouse count, while the shelf itself, your machinery and your delivery vehicle do not — those are tools of the trade, not trade itself.
One practical rule of thumb traders use: if you bought it to sell it, it counts; if you bought it to use it, it doesn't. A wholesaler's rice sacks count. His shop counter doesn't. A tailor's fabric stock counts. Her sewing machine doesn't.
What counts — and what doesn't
| Business asset | Zakatable? | How to value |
|---|---|---|
| Finished goods for sale | Yes | Current selling price |
| Raw materials intended for sale/production | Yes | Current wholesale price |
| Work-in-progress (half-made goods) | Yes | Best estimate of current value |
| Business cash & bank balances | Yes | Face value on zakat date |
| Receivables (customer credit due) | Yes | Amount realistically expected |
| Shop, warehouse, machinery, vehicles | No | — (fixed assets) |
| Fixtures, furniture, equipment | No | — (used, not sold) |
| Goods bought for personal/family use | No | — (not for trade) |
The trickiest line is receivables: only count money you genuinely expect to receive. If a customer owes you Rs 200,000 but the debt looks doubtful, most scholars advise counting it only when you actually receive it — check with a scholar you trust for borderline cases.
The valuation rule: market price, not cost price
This is where most traders under-calculate. Zakat on stock is not 2.5% of what you paid the supplier. It is 2.5% of what the stock is worth now — the price you could sell it for on your zakat date.
A simple way to do it: take your inventory list (you probably already keep one for your own accounts) and write the current selling price next to each line. For raw materials that have no retail price, use the wholesale price you'd get from another trader today. You don't need an auditor — a careful one-evening estimate beats a mathematically precise but ignored method.
Example 1: retail shopkeeper
Ayesha runs a garment shop in Lahore. On her zakat date (1st Ramadan) her position is:
| Item | Value (PKR) |
|---|---|
| Stock at current selling price | Rs 4,000,000 |
| Cash in till + business bank balance | Rs 500,000 |
| Receivables (regular customers on credit) | Rs 300,000 |
| Less: supplier payables due this month | (Rs 600,000) |
| Net zakatable business assets | Rs 4,200,000 |
| Zakat at 2.5% | Rs 105,000 |
Note the deduction: she owes suppliers Rs 600,000 payable soon, so that comes off before the 2.5% is applied. Her shop's fixtures, display racks and CCTV system don't appear at all — they're fixed assets, not stock.
Example 2: small manufacturer
Imran runs a shoe factory in Sialkot. Manufacturers have three layers of stock, and all three count:
| Item | Value (PKR) |
|---|---|
| Raw leather & materials (wholesale price) | Rs 1,200,000 |
| Work-in-progress (half-finished shoes) | Rs 800,000 |
| Finished shoes ready for dispatch | Rs 2,500,000 |
| Receivables from distributors | Rs 900,000 |
| Less: short-term business loans due this year | (Rs 700,000) |
| Net zakatable business assets | Rs 4,700,000 |
| Zakat at 2.5% | Rs 117,500 |
Check the math: 1,200,000 + 800,000 + 2,500,000 = Rs 4,500,000 in stock; plus 900,000 receivables = Rs 5,400,000; minus 700,000 debts = Rs 4,700,000; × 2.5% = Rs 117,500. The factory building and machines are excluded.
The nisab check and the lunar year
Zakat isn't due until your net zakatable assets exceed the nisab threshold for one full lunar year. In practice, most traders simply keep a fixed annual zakat date (many use Ramadan) and calculate on whatever their books show that day. If your business is new and this is your first year, the hawl starts when your assets first crossed nisab. For the current threshold in rupees and how to work it out from gold and silver rates, see our zakat nisab 2026 guide — and for gold specifically, our guide to zakat on gold.
One combination rule beginners miss: business stock combines with your other zakatable wealth. If your stock alone is below nisab but your stock + cash + gold together exceed it, zakat is due on all of it. Don't calculate the business in isolation if you also hold savings or gold.
Common mistakes to avoid
- Valuing at cost price. Stock rises and falls with the market — use today's selling price.
- Forgetting receivables. Customer credit is wealth too; add what you expect to collect.
- Including fixed assets. Machinery and premises are tools, not trade goods — leave them out.
- Ignoring personal assets. The flip side: gold at home and personal savings combine with your business assets for the nisab check.
- Missing the debt deduction. Short-term business debts genuinely reduce your net position — subtract them before applying 2.5%.
Key takeaways
- Zakat on stock = 2.5% of net zakatable business assets on your annual zakat date.
- Value stock at current market (selling) price, not purchase cost.
- Count finished goods, raw materials, work-in-progress, cash and receivables; deduct short-term business debts.
- Exclude fixed assets (shop, machinery, vehicles) and personal-use goods.
- This is general information, not a fatwa — consult a scholar you trust for unusual situations.
Frequently asked questions
How is zakat on business inventory calculated in Pakistan?
Add the current market value of all trade stock (finished goods, raw materials and work-in-progress), plus business cash and receivables, minus short-term business debts — then pay 2.5% of the total, provided it exceeds the nisab threshold after one lunar year.
Is zakat on stock valued at purchase cost or sale price?
Stock is valued at its current market (selling) price on your zakat due date — what you could sell it for now — not at the price you bought it.
Does zakat apply to shop fixtures, machinery and vehicles?
No. Fixed assets you use in the business — the shop itself, machinery, delivery vehicles, furniture and equipment — are not zakatable. Only goods held for sale and liquid business assets count.
Can I deduct business loans from zakat on inventory?
Short-term business debts — supplier payables and loans falling due within the year — are deducted from your zakatable business assets before applying the 2.5% rate.
When is zakat due on business stock?
When your net zakatable business assets stay above the nisab threshold for one full lunar (hawl) year, zakat is due on the valuation at your annual zakat date.